It can be difficult for rural Alaskan hospitals to recruit experienced financial professionals. That’s why the hospitals in Wrangell and Petersburg are taking a new approach to that challenge by sharing a chief financial officer.
Wrangell Medical Center and Petersburg Medical Center have a new agreement to share a chief financial officer.
Doran Hammett has been CFO at the Petersburg hospital for almost a year. Starting this month, he is splitting his time between Petersburg and Wrangell.
Wrangell Medical Center CEO Marla Sanger said the communities are sharing an expensive resource across two organizations that are very similar.
“We have the same computer system. We have the same financial auditor. We have the same cost report preparer,” Sanger said. “So these things are already very familiar to Doran.”
Petersburg Medical Center CEO Liz Woodyard said she is not sure if this will save much money.
“It’s not about the money,” Woodyard said. “It’s about having the right person in the job.”
And Woodyard said Hammett has been a great CFO.
Sanger agreed, and she said some of Wrangell’s past CFOs were not a good fit. WMC’s previous CFO left behind problems that became apparent in an audit after he resigned last year.
“So right now I’m feeling like I want to know that what we’re getting for the money we’re spending is going to deliver the value,” Sanger said.
Hammett said he already has a good relationship with WMC’s auditors.
“I do know last year you had some significant audit adjustments for your hospital,” Hammett said. “There is not an expectation that you will have anything like that this year. Everything looks very clean.”
Hammett said WMC has about 25 days’ worth of operating cash on hand. He said the hospital is in much better financial shape than it was a few months ago, but there is still a lot of work to do.
Small hospitals have also been struggling financially because of rising costs and problems with Medicaid reimbursements.
“We have to look at things differently and try different things in order to be able to take a hospital of our size, in a situation where survivability is difficult at best, and try to create ways and think of new ways that we can continue to be sustainable,” Sanger said.
Hammett has a three-year contract with the hospitals. He will spend about twelve days per month in each town, and he will make frequent visits to his home in Oklahoma. Hammett can also work remotely from any location.
He said he is looking forward to this arrangement, but he is not sure if it will work.
“Since I was here already, it gives both hospitals an opportunity to look at a shared CFO model to see if it will work without incurring any unusual expenses of recruiting and hiring and bringing someone here to see if it works,” Hammett said.
If it does not work, any of the parties can end the agreement with four months’ notice.
